Wall v. Pennsylvania Life Ins. Co.

Decision Date08 January 1979
Citation274 N.W.2d 208
PartiesAlvin WALL, Plaintiff and Appellant, v. PENNSYLVANIA LIFE INSURANCE COMPANY, Defendant and Appellee. Civ. 9504.
CourtNorth Dakota Supreme Court

Zuger & Bucklin, Bismarck, for plaintiff and appellant; argued by Robert V. Bolinske, Bismarck.

Pearce, Anderson, Thames & Durick, Bismarck, for defendant and appellee; argued by Patrick W. Durick, Bismarck.

PAULSON, Justice.

The appellant, Alvin Wall (hereinafter Wall) appeals from the judgment of the Burleigh County District Court entered in favor of the appellee, Pennsylvania Life Insurance Company (hereinafter Penn. Life), in Wall's action to obtain disability benefits under a health and accident insurance policy that he had purchased from Penn. Life. Following the trial the case was submitted to a jury of six by way of a Special Verdict form that required the jury to answer seventeen special interrogatories. The jury answered all of the interrogatories in Wall's favor and judgment was ordered for Wall. Penn. Life then moved for a judgment notwithstanding the verdict, or, in the alternative, for a new trial. The district court granted Penn. Life's motion for a judgment notwithstanding the verdict and Wall has appealed. We reverse.

In the fall of 1971, Arden Hoff (hereinafter Hoff), an insurance salesman for Penn. Life, called on Wall at his farm near Mercer and attempted to sell him a "Lifetime Disability Income Plan". Hoff showed Wall and his wife a sales brochure which indicated that the plan "PAYS $300 PER MONTH when you are SICK as long as total disability . . . continues from SICKNESS . . . PAYS $300 PER MONTH when you are HURT as long as total disability, total loss of time and regular medical attention continue from ACCIDENT . . . PAYS $900 PER MONTH when in the HOSPITAL for as long as THREE MONTHS . . .." Although Wall did not purchase a policy at that time, Hoff returned to Wall's farm on November 4, 1971 and sold him a "Lifetime Disability Income Plan" (hereinafter policy). Wall paid the $351.00 yearly premium at that time.

Wall, who is 57 years old, has had no formal education beyond the seventh grade. Because his reading and writing skills are not well developed, Wall's wife has taken care of his bookkeeping and correspondence since they were married. When Hoff sold Wall the policy he asked Mr. and Mrs. Wall the questions listed on the policy application form and filled in their answers. Wall then signed the application. Hoff refused to leave a copy of the policy with Wall at that time and the policy was not delivered to Wall until nine weeks later.

On approximately May 23, 1972, while the policy was in effect, Wall injured his back doing farm work. At the time he was engaged in the strenuous process of seeding his crops and he was working long hours because many of his cows had recently calved. The most strenuous part of the seeding operation involves loading the seed drill. In loading the seed drill Wall had to climb up two and one-half feet onto the seed drill's platform carrying sixty-pound bags of seed and fifty-pound bags of fertilizer, lift the bags up an additional eighteen inches and then dump the bags into the seed and fertilizer boxes. A single loading of the drill required twenty-eight sixty-pound bags of seed and ten fifty-pound bags of fertilizer. During a full day of planting Wall would have to load the drill four or five times.

At trial, Wall described the drill-loading procedure in detail. He testified that he lifted the bags from storage on the ground and loaded them onto a trailer, drove the trailer to the field, lifted a bag or two from the trailer, climbed two and one-half feet onto the drill platform and then emptied the bags into the boxes.

Although Wall does not recall a specific lift or twist that caused him to injure his back, he does remember pain beginning while he was riding his powerful Steiger four-wheel drive tractor. The longer he rode the tractor and continued to seed, the worse the pain in his back became.

Despite the pain of his back injury, Wall continued to work for approximately one week until he was hospitalized on May 30, 1972. He testified that he continued to work after injuring his back because he had to get his crops in and he had no one else to help him.

On June 5, Dr. Ralph Vinje performed back surgery on Wall who was suffering from a herniated intervertebral disc. Wall has been totally disabled since May 30, 1972, and has not been able to operate his farm or find employment in any other occupation.

On approximately July 13, Wall filed a claim for disability benefits with Penn. Life. For several months Wall heard nothing from Penn. Life regarding his claim. Wall then received letters from Penn. Life on October 11 and November 1 which indicated that his claim was still being investigated.

During the fall of 1972, a Penn. Life agent went to Wall's farm to collect the renewal premium on the policy which was due on November 4, 1972. Wall refused to pay the premium because he was upset that no action had been taken on his claim for benefits which had been filed in July. The agent told Wall that the company was working on the claim and he told Mrs. Wall that Wall should pay the premium because the company would take care of the claim that had been filed.

When Wall failed to pay the renewal premium on November 4, the policy apparently was terminated. Under the terms of the policy the thirty-one day "grace period" which allows premiums to be paid up to thirty-one days late, does not apply to the first renewal premium. 1 On November 16, twelve days after the policy had allegedly terminated when Wall failed to pay the renewal premium, Penn. Life wrote Wall and notified him that his claim for benefits had been denied.

Wall commenced this action against Penn. Life for benefits under the policy on July 13, 1976. The trial began on January 10, 1978. At the close of Wall's case, Penn. Life made a motion for a directed verdict which the trial court denied. On January 13, the jury answered seventeen special interrogatories in Wall's favor and returned a verdict for Wall in the amount of $23,902.40 plus costs. Judgment was entered for Wall on February 2.

Penn. Life subsequently moved for a judgment notwithstanding the verdict, or, in the alternative, for a new trial. On March 6, a hearing on the motion was held. The district court granted Penn. Life's motion for judgment notwithstanding the verdict, or, in the event that the judgment notwithstanding the verdict was reversed on appeal, a new trial. Judgment was entered for Penn. Life on May 15 and Wall appealed to this court on May 30, 1978.

The following issues are raised on appeal:

1. Was Wall's cause of action barred by the Statute of Limitations?

2. Did the trial court err in reversing the jury's verdict for Wall and granting a judgment notwithstanding the verdict for Penn. Life thereby denying coverage under the policy?

(a) Did Wall fail to prove, as a matter of law, that his injury was caused by an accident?

(b) Did the policy lapse because Wall failed to pay the first renewal premium on November 4, 1972?

3. Did the trial court err in granting Penn. Life's alternative motion for a new trial in the event that its judgment notwithstanding the verdict was reversed on appeal?

Penn. Life, in its answer, motion for summary judgment, motion for directed verdict, and motion for a judgment notwithstanding the verdict, raised the defense that Wall's action was barred by the applicable Statute of Limitations. In deciding all three motions, the district court ruled that the Statute of Limitations did not bar Wall's action. We will now consider whether the court's rulings denying the applicability of the Statute of Limitations constituted error.

Section 26-03.1-03(1), N.D.C.C., requires that every accident and sickness insurance policy "delivered or issued for delivery to any person in this state shall contain the provisions specified in this subsection". Among the provisions that must be included in any accident and sickness policy are those that determine the applicable Statute of Limitations.

Section 26-03.1-03(1)(k), N.D.C.C., requires that the following provision be included in each sickness and accident policy:

"LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought After the expiration of three years after the time written proof of loss is required to be furnished. (Emphasis added.)"

This provision was included in the policy which Wall purchased from Penn. Life.

Section 26-03.1-03(1)(g), N.D.C.C., set forth below, in pertinent part, is also a required provision that was properly included in Wall's policy 2 :

"PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at its said office in case of a claim for loss for which the policy provides any periodic payment contingent upon continuing loss Within ninety days after the termination of the period for which the insurer is liable . . . . (Emphasis added.)"

Pursuant to Wall's policy and § 26-03.1-03(1)(k), N.D.C.C., no action under the policy may be commenced later than "three years after the time written proof of loss is required to be furnished". Therefore, the Statute of Limitations under the policy begins to run on the last date on which written proof of loss may be filed.

In the present case written proof of loss was required to be furnished "within ninety days after the termination of the period for which the insurer is liable". Section 26-03.1-03(1)(g), N.D.C.C. In order to decide whether the Statute of Limitations serves to bar Wall's action, we must determine the meaning of the above-listed phrase.

Penn. Life contends that "within ninety days after the termination of the period for which the insurer...

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